The Bears Have Thanksgiving While the Bulls Have Christmas

Good afternoon

There is a saying on Wall Street that “the bears have Thanksgiving while the bulls have Christmas” … and, so far today, the bears seem to still be in hibernation … with the Dow up … inching its way toward the 19,000 mark … a level that, if reached, would be met with great fanfare (and catch quite a few people by surprise).

The funny thing is that there seems to be no real catalyst driving us toward another record close … unless, of course, not having any really bad news is … in itself … a bullish sign.

There is one bit of caution to take note of … if you happen to be one of those who ascribes to the view that history repeats itself. According to Sam Stovall of stock research firm CFRA, every Republican president since Teddy Roosevelt was met by a recession during their first term in office. Before you think this was only a few in number, here is the list: T. Roosevelt, Taft, Harding, Coolidge, Hoover, Eisenhower, Nixon, Ford, Reagan, George H.W. Bush and George W. Bush. I spent some time this morning reviewing this and most had recessions during the first year in office.

But should you be concerned? Maybe not … at least based solely on this. One thing that should be pointed out is … do you know how many recessions the U.S. had in the 100 years spanning from 1900 to 2000? 20. We were in recession one out of every 5 years over that time period … but we have had only 2 in the last 25 years! Maybe the work of the Fed … though not perfect … is improving things after all.

On a final note for today … I ran into someone the other night that reads my stuff and said they prefer personal stories – at times – over economic stuff. … so here goes:

I was invited to a black tie affair Saturday night and, fortunately, tried on my tux the day before. Unfortunately though, it shrunk while in my closet (probably due to the closet light being too bright) and I needed to get another jacket – and fast! I went to a store whose name I won’t mention … as the people from Joseph Banks might not like it … and the tape measure came out. I was told my jacket size was the same size as the one in my closet, my neck size was the same as in high school … and my 12-year old has the same sleeve size as to what was measured as mine (15 ½” neck? 32-inch sleeve! Get out of town!). I told the salesperson to buy another tape measure and ran out of the store.

When reviewing portfolios, the typical investor will pile into things that have outperformed … get out of stocks or funds that have not … while history shows the typical investor … by following this strategy … tends to do worse than if they made no change at all.

When it comes to investing … or jacket sizes … the past is somewhat irrelevant. Make sure the right expert (and it might be you) is helping out.

The future is the only tape measure that really matters.

Have a great day.

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management
(717) 396-1116
A Quick Look at the News
November 21, 2016

Joseph G. Witthohn, CFA |

… as of 10:48 AM today …

If history is any guide, we will have a recession sometime in the next four years … as it is always seems to happen in a Republican president’s first term. Now, if we could just talk him into switching parties … (USAToday)

There are 1700 new millionaires every day in America … and the biggest driver behind this newfound wealth? Inheritance! So be careful not to start any wars during the Thanksgiving meal (Bloomberg)

… though there is one way to focus more on your family … and less time wasted in the kitchen … with the help of Alexa. 60,000 recipes are now at your disposal. I sure hope that is enough! (TheVerge)

It continues to race towards us. What am I talking about? The self-driving car … now tested on the roads of Boston. This is a true test as if it can handle things there … anything is possible (Recode)

Do you have trouble getting workers (especially creative ones) to start work on time? Get away from the 9-to-5 habit and be a bit more innovative (BBC)

… but one thing that goes a long way in improving the culture of your firm, is something quite simple … a heartfelt thank you. Sometimes thanks is all an employee is looking for (Forbes)

And … speaking of thanks … Thanksgiving is almost here … and an interesting thought is just where do we direct our thanks? Do we say a prayer of thanks for the food … or direct it towards our guests for being with us? Why not both? With so many ways to reach out to others … why is a simple “thank you” so hard? (USNews)

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